Green Reefers Loss Widens

Norway's Green Reefers, a refrigerated cargo ship operator, reported fourth quarter 2010 pre-tax losses widened to $24 million from $18.7 million a year ago on historically low spot freight rates, flat cargo volume and depreciation and write downs on ship values.

The Oslo-listed carrier's net income slipped to $21.9 million from $32.4 million in the final three months of 2009.

Green Reefers said the market has picked up in recent weeks on an improved balance between supply and demand but the prospects for conventional cargo ships depend on the developments in the reefer container sector.

By The Numbers: Asia-Europe Westbound Container Traffic

Spot rates were down 5 percent in the 2010 fourth quarter compared with a year ago and a rally in early December flattened out over the Christmas vacation. Average rates through 2010 were 8 percent lower than in 2009.

The seasonal rise in fourth quarter traffic was delayed a month until December due mainly to lower fish volume in most markets and heavy rains in South America that cut fruit exports.

"When poultry [shipments] from [the] U.S. to Russia did not contribute with the expected large volumes until the end of the quarter, the pressure on spot rates was considerable," the company said.

Eight of Green Reefers fleet of 29 owned and six chartered ships were off hire in the quarter -- two vessels were laid up and six underwent dry docking.

Full year pre-tax losses grew to $58.2 million from $39.1 million as operating income declined to $148.4 million from $193.4 million.

Following a restructuring in 2010, Green Reefers commercial activities are carried out in pools -- 25 ships operate in Hamburg Reefer Pool with the rest working with Seatrade Reefer Chartering and Silver Green.

Spot rates have increased since the beginning of 2011 and are above the level of the previous three years, Green Reefers said.

Shipowners worldwide sold for scrap 44 conventional reefer vessels with a combined capacity of 17.6 million cubic feet in 2010 while adding only two new ships to the world fleet for a 6 percent net reduction in capacity.

"This is expected to contribute to better balance between supply and demand in the market, but effects in the reefer container business will influence how rapidly changes may materialize," the company said.

-- Contact Bruce Barnard at brucebarnard47@hotmail.com.